IBM, United Tech results pull down Dow, S&P 500

However, the Nasdaq Composite hovered near record levels ahead of a raft of earnings from tech giants including Apple and Microsoft

Weak results from IBM and United Technologies weighed on the Dow and the S&P 500 while the Nasdaq Composite hovered near record levels ahead of a raft of earnings from tech giants including Apple and Microsoft .

IBM's shares fell as much as 5.3 percent to $164, a day after the company's revenue fell for the 13th consecutive quarter.

United Technologies fell as much as 6.6 percent to $103.18 and was the biggest loser on the Dow, after the company cut its full-year profit outlook.

"The indexes will continue to stay range-bound but at the higher end during the course of the earnings season because it has already factored in a rate hike this year," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

On Monday, the Nasdaq composite touched a new intra-day high for the third straight day while the S&P 500 was just shy of its all-time high.

While markets are at record highs, June-quarter earnings of S&P 500 companies are expected to dip 2.1 percent, according to Thomson Reuters data.

Of the companies that have reported earnings so far, 70 percent have reported earnings above analyst expectations, above the 63 percent average beat rate since 1994.

However, 55 percent have topped revenue forecasts, below the 61 percent average beat rate since 2002. U.S. companies were expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar that reduces the value of U.S. companies' overseas income.

The dollar index was down 0.3 percent at $97.76, and had earlier traded at its highest level since April on firming expectation of a U.S. interest rate hike later in the year.

Tech giants such as Yahoo, Microsoft and Apple are scheduled to report results after market close. Strong earnings from technology companies have been driving gains in the Nasdaq.

At 9:54 a.m. ET (1354 GMT) the Dow Jones industrial average was down 125.4 points, or 0.69 percent, at 17,975.01, the S&P 500 was down 1.85 points, or 0.09 percent, at 2,126.43 and the Nasdaq Composite was up 3.74 points, or 0.07 percent, at 5,222.60.

Seven of the 10 major S&P indexes were lower with the telecommunications index leading the decliners with a 1.76 percent drop. Verizon Communications' 2.7 percent fall weighed the most on the index.

Lexmark International slumped as much as 16.3 percent to $39.60, its lowest in four months, after the printer maker said it would cut 500 jobs, or about 4 percent of its global workforce.

Tesla fell 4.7 percent to $269.35 after UBS downgraded its rating on the stock to "sell" from "neutral". The downgrade is the third this month.

Harley-Davidson was up 4.1 percent to $57.23 after its quarterly profit beat expectations.

Advancing issues outnumbered decliners on the NYSE by 1,672 to 1,045. On the Nasdaq, 1,501 issues rose and 835 fell.

The S&P 500 index showed 16 new 52-week highs and nine new lows, while the Nasdaq recorded 61 new highs and 54 new lows.